Branch Pro: Meet the First Neobank in Kenya

Branch Pro is the first neobank in Kenya, offering digital banking services to individuals and small businesses. This innovative platform promises to revolutionize the way Kenyans manage their money by offering digital financial services through a user-friendly mobile app

It is a digital-only bank, meaning it operates exclusively online and does not have physical branches

In this article, we’ll review the features, benefits, and challenges of Branch Pro, as well as its impact on the banking landscape in Kenya.

1What is Branch Pro?

2What is Branch International?

3What is a Neobank?

4What are the Features and Benefits of Branch Pro?

5How did Branch Pro become a Neobank?

6How does this Neobank use AI to Manage Borrowing Risk?

7What’s the New Development at Branch Pro?

8What Major Challenges will this Neobank Encounter?

9What is the Impact of Branch Pro in the Banking Industry?

10FAQS

11Conclusion

12References

13Recommendations

What is Branch Pro?

Branch Pro is the first digital bank in Kenya, offering services through a mobile app instead of physical branches like traditional banks. It was launched in 2023 by Branch International, a fintech company known for mobile loans, representing a significant advancement in Kenya’s financial landscape.

Branch Pro stands out for several reasons. It offers savings accounts to manage money securely, allows instant money transfers within its network and other mobile wallets, has competitive fees compared to traditional banks, and employs top-notch security measures to protect financial information.

Branch Pro also has additional features that make it attractive, such as personalized financial products using AI, future plans for bill payments and investments, and a user-friendly mobile app for managing finances conveniently.

In terms of impact,this Neobank aims to promote financial inclusion by offering accessible and affordable services. It also encourages competition and innovation in the financial sector and provides educational resources for users to make informed financial decisions.

It’s important to note that Branch Pro is not just limited to Kenya; it’s available in India as well and may expand to other markets in the future. Its focus on financial inclusion and digital accessibility has the potential to significantly impact the lives of millions of people.

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What is Branch International?

Branch International is a pioneering Neobank in Kenya, committed to providing accessible and affordable financial services to individuals and small businesses.

It focuses on innovation and uses cutting-edge technology, including Artificial Intelligence, to offer personalized solutions that promote financial inclusion and economic empowerment.

Branch was founded in 2015 by Daniel Jung and Matthew Flannery and has disbursed over $1 billion to 5 million borrowers worldwide in the last 6 years. The app has been downloaded over 21 million times, with an average user rating of 4.4.

What is a Neobank?

A neobank operates solely online, without physical branches, offering services via mobile apps and websites to reduce costs and provide low fees and competitive rates. Neobanks typically provide services like savings and checking accounts, money transfers, and loans.

Some offer AI-driven personalized products, prioritizing mobile-first experiences, transparent fees, and financial inclusion. Popular neobanks include Chime (US), Revolut (UK), N26 (Germany), Nubank (Brazil), and Starling Bank (UK).

Neobanks are gaining popularity, particularly among younger generations, as a convenient and affordable financial management option, but it’s crucial to compare options before choosing one.

What are the Features and Benefits of Branch Pro?

Branch Pro stands out for its diverse array of digital banking services, catering to both individual and small business needs. From savings and current accounts to loans and investments, Branch Pro provides a comprehensive suite of financial products accessible through its intuitive digital platform.

This platform is designed with user-friendliness in mind, empowering customers to effortlessly manage their finances online.

Moreover, Branch Pro offers convenience through its extensive network of ATMs and partner banks, facilitating easy cash withdrawals and deposits for its clientele. One of the standout features of Branch Pro is its commitment to affordability.

The bank imposes no monthly maintenance fees on savings and current accounts, and its loan rates remain competitive, ensuring cost-effectiveness for customers.

For small businesses, this Neobank goes the extra mile by tailoring financial solutions to their specific requirements. Whether it’s business loans or merchant services, Branch Pro provides flexible options to support the growth and success of entrepreneurial ventures.

Security is paramount in the digital banking realm, and Branch Pro prioritizes it by implementing robust encryption and authentication protocols to safeguard customers’ sensitive information.

Additionally, the bank offers round-the-clock customer support, ensuring prompt assistance whenever needed, thereby enhancing the overall banking experience.

However, Branch Pro excels in providing accessible, affordable, and secure digital banking solutions, making it a valuable asset for individuals and small businesses alike seeking convenient and reliable financial services in Kenya.

How did Branch Pro become a Neobank?

In 2023, Branch International, a fintech company, obtained a banking license from the central bank of Kenya and acquired a microfinance bank in Kenya. This allowed Branch to operate as a neobank, offering various products and services, including the potential for future business loans.

Loan apps in markets like Kenya have faced challenges, and regulators have implemented laws to protect consumers, such as preventing personal data abuse and ensuring loan companies have physical offices. These laws also require digital credit companies to be licensed, leading to a significant reduction in the number of licensed digital apps.

Branch, founded in 2016 as a digital lender, has transitioned into a neobank following the acquisition of Century Mfb. Branch operates in Kenya, Tanzania, Nigeria, and India, aiming to participate in the digital banking sector alongside other neobanks like Fingo and NCBA Loop.

Matt Flannery, Branch’s founder and CEO, and Rose Muturi, the company’s managing director for East Africa, stated that the platform seeks a larger market beyond basic online loans. Branch obtained a microfinance license from the Central Bank of Kenya and bought Century Microfinance.

It then transformed its products and services to be fully neobank-based, closing most of Century’s physical branches across Kenya. Only one banking hall remains, serving some enterprise customers inherited from Century.

While Branch acquired a banking license from the Central Bank of Kenya, there is currently no specific regulatory framework for neobanks. Muturi hopes the Central Bank of Kenya will develop regulations tailored to neobanks in the future.

Branch offers three primary products: loans, savings, and payments through Branch-specific tills. Customers can also send funds to each other for free, eliminating additional costs associated with transferring funds to other mobile money wallets like M-PESA.

How does this Neobank use AI to Manage Borrowing Risk?

Branch which boasts a customer base of 4.5 million clients,harnesses the power of AI, machine learning, and advanced algorithms to determine creditworthiness. Although these technologies are not new, the popularity of AI has soared in recent months due to its remarkable capabilities and accessibility to millions worldwide.

In the case of Branch, AI algorithms play a pivotal role in assessing the creditworthiness of potential borrowers. The Chief Technology Officer at Branch Pro, Anshul Agrawal, analyzes an array of data points, including credit history, to gauge the likelihood of loan repayment.

Furthermore, AI algorithms scrutinize borrower profiles, financial data, and preferences to offer tailored loan recommendations. This explains why different applicants receive distinct suggestions; while individuals with low credit scores might be declined, they have the opportunity to improve their repayment records for future loan applications.

What’s the New Development at Branch Pro?

Branch International, the Neobank, has rolled out two fresh features to amplify customer empowerment. Its Flexi and Target savings products offer lucrative interest rates – 9% p.a. for Flexi and 15% p.a. for Target, on customer deposits.

Mrs. Muturi emphasized the significance of savings for financial stability. To meet this need, the Branch Flexi Savings Account was introduced. This versatile savings solution allows customers to stash funds at their own pace. With the competitive rates mentioned earlier, customers can save while accessing funds as needed. This provides them with the financial flexibility they need.

All you have to do is fund your account from your Branch wallet. Once the wallet is funded, select the ‘Savings’ option, choose Flexi savings, input your desired amount, finalize your savings, and start enjoying 9% or 15% P.A. interest.

Additionally, Branch pro has introduced Pay to Till, a new payment option within their app. This feature lets customers make seamless payments to merchants by scanning QR codes at their respective tills.

This eliminates the need for physical cash transactions, offering users the convenience of paying directly from their Branch International app. It’s crucial to always update the app to enjoy its benefits. Branch is a for-profit company that uses data science to reduce the cost of delivering financial services in emerging markets.

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What Major Challenges will this Neobank Encounter?

One of the challenges facing Branch Pro is the limited access to banking services in Kenya. While the country has a high mobile phone penetration rate, many people still lack access to banking services, particularly in rural areas.

This means that Branch Pro may struggle to reach potential customers who do not have access to the internet or smartphones.

Another challenge for Branch Pro is competition from traditional banks and other fintech companies. Kenya has a vibrant fintech ecosystem, with a number of digital banking platforms and mobile money services competing for customers.

Branch Pro will need to differentiate itself from these competitors and offer unique value propositions to attract and retain customers.

What is the Impact of Branch Pro in the Banking Industry?

Branch Pro has the potential to disrupt the banking landscape in Kenya by offering affordable and accessible digital banking services.

The bank’s low fees and user-friendly platform could make it an attractive option for people who are currently underserved by traditional banks.

Branch Pro could also encourage other banks and fintech companies to innovate and improve their offerings, leading to a more competitive and dynamic banking sector in Kenya.

FAQS

What is Branch Pro?

Branch Pro is Kenya’s first fully licensed neobank, meaning it offers digital financial services through a mobile app instead of physical branches.

When was Branch Pro Launched?

It was launched in 2023 by Branch International

What are Branch’s features?

It provides features like savings accounts, money transfers, and competitive fees.

Why is Branch Pro important?

Branch Pro promotes financial inclusion by offering accessible services. It also encourages innovation and financial literacy in Kenya.

What services does Branch Pro offer?

Branch Pro currently offers secure savings accounts, quick money transfers, competitive fees, industry-leading security, and reliability. It has plans to expand to bill payments and investments.

What are the benefits of using Branch Pro?

You can easily manage your finances with the user-friendly mobile app. Branch Pro offers lower fees compared to traditional banks. You don’t need physical branches, making it accessible to anyone with a smartphones. Your information is protected by industry-standard security measures.

Is Branch Pro safe?

Yes, Branch Pro uses industry-leading security measures to protect your financial information. It is also fully licensed by the Central Bank of Kenya.

How do I sign up for Branch Pro?

You can download the Branch Pro app from the Google Play Store or App Store and follow the on-screen instructions.

What are the fees associated with using Branch Pro?

Branch Pro offers clear and transparent fees. You can find detailed information within the app or on their website.

Is Branch Pro a good option for me?

It depends on your individual needs and preferences. If you’re looking for a convenient, affordable, and secure way to manage your finances, Branch Pro could be a good option for you.

Conclusion

The arrival of Branch Pro in Kenya marks a turning point in the nation’s financial landscape. As the first licensed neobank, it offers the potential to empower millions with convenient, accessible, and affordable financial services.

While it’s still early days, Branch Pro’s commitment to innovation and financial inclusion presents exciting possibilities for the future of financial well-being in Kenya.

Whether you’re a seasoned user of digital banking or just starting your financial journey, it’s worth keeping an eye on Branch Pro’s evolution and seeing how it can shape the way Kenyans manage their money.

Remember, informed decisions are powerful, so explore your options, learn about neobank and choose the financial tools that best suit your needs.

References

branch – Better than your bank
techcabal – What is Branch Pro, and why is the lender keen on becoming a full-fledged neobank?
aptantech – Branch, the pioneer neobank harnessing Artificial Intelligence to reduce credit risk